Description: The so-called Cadillac tax—a 40% excise tax on employee health benefit spending in excess of certain caps—is due to be implemented in 2018 and is already having a devastating impact on employment-based healthcare benefits and union bargaining prospects. This workshop will explore the flawed assumptions that the tax is based on, its potential impact on workers and their families and the growing efforts to repeal it and will debate how the single-payer movement should relate to those efforts.

Notes from Conference Participants:

Jim McGee:

40% excise tax on $ above threshold

removes tax deductibility

After 2018, indexed to CPI -> problematic because medical inflation higher than all inflation. No adjustments for age or geography. "Cost" evaluates premiums (total), HSAs, and PSAs.

Employees also have to pay additional corporate income tax.

All plans will be above the threshold at some point (if meeting minimum ACA value)

Not clear if will be able to calculate tax into ratings for TPA plans.

Government assumes lower cost plans will = higher wages

Higher employee premiums does not equal lower tax

Why flawed? Assumptions:

health benefits should be considered as wages

consumers paying more = lower cost

excise tax needed to fund Affordable Care Act

"Why wrong":

healthcare is not earned -> tax deductions are for social positive externalities (pensions, education, etc)